unit
4 Great ideas
partnerships in innovation
Before you read
Where do companies usually get their ideas from?
Reading
Read this article from the Financial Times by Jonathan Birchall and
answer the questions.
Innovation brings growth
By Jonathan Birchall
TEXT BANK
Procter & Gamble, the world’s
largest consumer goods company,
is a global industry leader in new
consumer product innovation.
5 According to data from IRI,
the market research firm, it
produced five of the top 10 US
non-food product launches last
year. Its goal is to add another
10 1bn customers to the estimated
4bn it already reaches. Bob
McDonald, its chief executive,
says that the road to more
innovation should increasingly
15 include other people’s good ideas.
“We need bigger innovations
that create more value,” Mr
McDonald told this year’s annual
awards event for companies and
20 research centres that work with
128
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P&G. “We want you to come to
us with your big ideas first.”
External co-operation has
delivered a stream of successful
25 “big idea” products. Last year,
IRI’s list included Tide Total
Care, a premium version of its
Tide detergent. This product
was number two by sales on
30 IRI’s top 10 list of non-food
products. It was developed with
external research from Sweden’s
University of Lund and from two
small chemical companies.
35 P&G’s list of partners includes
other large corporations, such as
food groups ConAgra and General
Mills, and rivals, including
Clorox. P&G is developing a joint
40 venture with Clorox to produce
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level of difficulty
Glad brand plastic bags. Its most
unexpected government research
partner may be the Los Alamos
National Lab, the US defence
45 technology research centre. Los
Alamos initially helped P&G to
produce one of the chemicals
used in babies’ nappies, using
data analysis systems developed
50 for weapons technology.
One of the programme’s early
success stories was its Olay
Regenerist anti-ageing creams,
which was built around a chemical
55 process developed by Sederma,
a French company. “As a small
company, we had little chance of
getting in there until P&G changed
its policy,” says Karl Lintner,
60 who headed Sederma at the time.
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 TEXT BANK •• uNiT 4

1 Look through the whole article to find the
names of:
a) a consumer goods company.
b) its CEO.
c) a market research organisation.
d) a Scandinavian university.
e) two big food companies.
f) a competitor of the company in item a) above.
g) a military research laboratory.
h) a French company.
5 Choose the best summary for the whole
article.
Procter and Gamble …
a) has always welcomed co-operation with other
companies to develop new products.
b) only works with American companies to develop
new products.
c) has realised the importance of working with
other organisations, not only companies, on new
products.

Over to you 1
2 Now look through the whole article again to
What are the risks of working on new products with
find the products developed in partnership
competitors in joint ventures?
with the organisations in items d), f ), g) and
h) in Exercise 1 above.
Over to you 2
Is there co-operation in your country between
3 Find expressions in paragraph 1 with the
businesses and universities to develop new products
number of words shown in brackets that and services? If there is, give some examples. If not, try
mean the following. to explain why.
a) the biggest organisation anywhere in the world
that makes products for the general public (6)
b) the biggest and best company of its kind
anywhere in the world (3)

TEXT BANK
c) developing new products for the general public
(3)
d) an occasion every year where prizes are given (3)

4 Read paragraphs 3 and 4 and decide if these

statements about expressions are true or
false.
a) External co-operation (line 23) is when a company
develops a new product by itself.
b) The word stream (line 24) is used here to refer to
water.
c) A premium version (line 27) of a product is less
good and costs less than the ordinary version.
d) The word chemical is used in line 34 as an
adjective and in line 47 as a noun.
e) A corporation (line 36) is usually a small
business.
f) A joint venture (lines 39–40) is when two
companies work together on a particular project.
g) The word data (line 49) refers to information,
especially information analysed on computers.

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 unit
4 Great ideas

accepting new ideas

Before you read
The expression ‘Not invented here’ is used by someone to say that an
idea or new product did not start in their department or company.
Why is it difficult for organisations to accept ideas that are ‘Not
invented here’?

Reading
Read this article from the Financial Times by Stefan Stern and answer
the questions.

level of difficulty

Open your mind to the idea of innovation

TEXT BANK

By Stefan Stern

The three most dangerous words
in management? “Not invented
here”. As Henry Chesbrough,
executive director of the
5 Center for Open Innovation at
the University of California,
Berkeley, has pointed out, senior
management teams can fail
to spot important innovations
10 because the new ways of doing
business do not easily fit in with
the way they are doing things
now.
Researching the performance
15 of Xerox, the copier and printer
company, Prof Chesbrough found
that, out of 35 projects that had
been rejected as part of a review
process, 10 had gone on to become
20 highly successful businesses.
Indeed, the combined value of
these 10 new projects was twice
that of Xerox itself. He calls these
rejections “false negatives”: the
25 innovations had looked bad, but
that was because senior managers
did not recognise their benefits.
Prof Chesbrough was one
of the speakers at last week’s
30 Financial Times innovation
conference in London. The
conference also heard from
Brian Dunn, chief executive of
Best Buy, the electrical goods
35 retailer. He told a story of how his
company had in the past 20 years
brought in new ways of doing
things again and again.
Whether it was ending
40 commissions for sales staff,
starting to sell on the Internet, or
renewing the company’s approach
to customers, or expanding
abroad: each time, Best Buy’s
45 leadership did not make the
decisions easily. Each time, there
were smart people at the top who
resisted change, he said. Necessary
innovations are hard to introduce
50 when, as in Best Buy’s case, the
business seems to be doing fine.

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 TEXT BANK •• uNiT 4

1 Put the paragraph headings in the correct
order.
a) Best Buy’s difficult innovation decisions
b) Company managers can fail to see new ideas
c) The innovation process at Xerox
d) Regular innovations at Best Buy
2 Read paragraphs 1 and 2 and decide if these
statements about expressions and related
expressions are true or false.
a) An innovation (line 9) is a new idea, product, etc.
Innovation (line 5) is new ideas, products, etc. in
general.
b) If you point something out (line 7), you don’t talk
about it.
c) If you spot something (line 9), you don’t see it.
d) If something fits in (line 11) with something else,
it’s acceptable.
e) If something is rejected (line 18), it is accepted.
f) In a review process (lines 18–19) things, ideas,
etc. are judged.
3 Find expressions in paragraphs 3 and 4 with
the number of letters shown in brackets that
d) What does Best Buy do?
i) It’s a wholesaler of electrical goods.
ii) It’s a retailer of electrical goods.
iii) It makes electrical goods.
e) Why is Best Buy mentioned?
i) Because it is similar to Xerox in its approach
to innovation.
ii) Because it did not innovate at all.
iii) Because it does accept new ideas, but only
after a lot of disagreement and discussion.
f) Why was it particularly difficult to introduce new
ways of doing things at Best Buy?
i) Because it was already a successful company.
ii) Because most of its senior managers resisted
them.
iii) Because it did not need them.
5 Choose the best summary for the whole
article.
Companies …
a) do not find it easy to accept new ideas.
b) do not accept new ideas because many managers
are stupid.
c) accept and develop new ideas easily.

TEXT BANK
mean the following.
Over to you 1
What does your own school or organisation do to keep
a) boss (5, 9) itself open to new ideas?
b) introduced (7, 2)
c) repeatedly (5, 3, 5) Over to you 2
d) payments in addition to salary (11) What do you do to keep yourself open to new ideas?
e) senior managers considered as a group (10)
f) fought (8)
g) needed (9)

4 Read paragraphs 2, 3 and 4 and choose the

correct answer.
a) How many of the new business projects rejected
in Xerox’s review process went on to become
successful businesses?
i) most of them
ii) more than half of them
iii) nearly a third of them
b) How much were the businesses worth in relation
to the value of Xerox?
i) twice as much
ii) the same
iii) half as much
c) Why had Xerox managers rejected the new
business ideas?
i) Because the ideas were not explained
properly.
ii) Because the managers couldn’t see their
value.
iii) Because the managers didn’t understand the
ideas.

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